Home Office Deduction|Wilson & Assoc Chartered Accountants

Home Office Deduction – the Actual Cost Method

If you work from home you can claim home office deductions under 3 alternative methods: 

1. The Shortcut method

2. The Fixed Rate method

3. The Actual Cost method

The Actual Costs Method

If you have a dedicated work area, you can claim additional running costs and the decline in value of office furniture used in the area for work purposes.

To calculate actual expenses for your dedicated work area, you can:

      •  keep a diary for a typical four-week period to show your usual pattern and duration of working at home

     •  work out the decline in value of depreciating assets in the proportion they are used for work.  Make sure to keep their receipts.

     •  work out the cost of your proportional cleaning expenses (ie, for the floor area used for work as a percentage of the entire floor space of the house, less proportional use by other family members )

     •  work out the proportional cost of your heating, cooling and lighting 

You must also take into account if any other members of your household use the home office and, if so, apportion your expenses accordingly.

You can claim a depreciation of equipment, furniture and furnishings that cost more than $300.

If you don’t have a dedicated work area, and if there are other people using the area at the same time you are working, deduction is unlikely to be allowed for lighting, heating or cooling.

Source: ATO

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Disclcaimer: The information provided within this article is general information only.  None of the comments in these notes are intended to be advice, whether legal, financial product or professional. You should obtain specific advice regarding your particular circumstances from a tax or legal professional.

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